Former UCAN boss faces trouble at home

Shames is on HOA board, where residents have complaints

Bob Rydberg, a 25-year resident, passes out fliers raising concerns over contracting and governance on his HOA board. Painters in the background told U-T Watchdog they work for the same man who owns the property management firm, which Rydberg says is a conflict.
— Jeff McDonald

Bob Rydberg, a 25-year resident, passes out fliers raising concerns over contracting and governance on his HOA board. Painters in the background told U-T Watchdog they work for the same man who owns the property management firm, which Rydberg says is a conflict.
— Jeff McDonald

Michael Shames, the longtime Utility Consumers’ Action Network chief who left last year amid an internal squabble at the nonprofit organization, is now facing a new dispute — this one closer to home.

Shames, who was a high profile consumer advocate before leaving UCAN, is on the board of his community’s Mission Valley homeowners association, which has become the target of multiple complaints from residents.

The criticism of Fashion Hills community management is baseless, Shames says.

“We are remarkably well managed, have a fully-funded reserve, among the lowest homeowner fees in the county ($195 per month that includes full facilities) and a stable base of homeowners who are very satisfied with the state of the association,” he said.

At least a few residents are unhappy, leafleting the complex with fliers and complaining about how the place is run. They say painting services have been cut back, and there are conflicts of interest and licensing issues regarding management and maintenance.

Specifically, a company owned by the property manager was given a $184,000 painting contract.

“It’s a definite conflict of interest for him to do both,” said 25-year resident Bob Rydberg. “Because if you have a problem with the paint, normally we would go to the property manager to resolve it. But he’s also the paint contractor, so how is he going to resolve a problem we have with the paint contract?”

Residents of the 226-unit complex north of Fashion Valley mall also worry that the selected paint contractor lacked a required state license for paint jobs.

“The board is supposed to act on our behalf as homeowners,” resident Chris Morgan said. “They have a certain standard they should meet, and I don’t think they’re doing their job.”

State records show Robert Borrego owns Exclusive Property Management and Southern California Property Maintenance, which was awarded the paint contract. Both companies are based in a home he owns in south Mission Hills.

Borrego, on the advice of his lawyer, did not return calls seeking comment about his dual roles for the association.

“He and the board are working to resolve their problems,” attorney Dale Larabee said.

Association president Robin Davis declined to discuss the complaints. Shames said there is no conflict of interest between the two businesses.

“Most decent size management companies do have in-house maintenance for a host of compelling reasons,” he wrote. “The key is transparency and bidding.”

Shames said Borrego recently subcontracted the painting work to a duly licensed company. He declined to provide records. Painters working on Thursday told U-T Watchdog they work for Borrego.

Borrego holds a valid Class B general building contractor’s license. The Contractors State License Board said painting jobs valued at more than $500 require a specialty C-33 license.

At least three homeowners have filed complaints with the state board. A spokeswoman said the complaints have not been fully investigated.

Records show the board gave some consideration to possible conflicts before awarding the contract.

“The board was advised by its board member, attorney Michael Shames, so as to be certain that there were no conflicts of interest or ethical issues,” an association newsletter states.

The painting has typically been done every five years. Residents say that between June and August, the job was scaled back to require homeowners to paint parts of their homes themselves.

The June contract calls for Borrego to paint French doors, patio covers and utility doors. In August, an association notice informed owners that work would not be included.

Shames said the specifications were not materially changed.

The Fashion Hills Owners Association is a mutual benefit nonprofit. Homeowners pay $195 a month to maintain common areas and pay for insurance and other services.

The organization, which last year took in $533,000, is governed by an elected board of directors. Shames has served multiple terms on the board.

Experts in homeowners-association law say it is not a good practice to have the same person serve as property manager and maintenance provider.

“The conflict exists because as a property manager you have a duty to put your clients’ interests ahead of your own interests,” said Michael Chulak, a Los Angeles area attorney who also owns a property-management company. “You cannot serve two masters.”

Marjorie Murray of the Center for California Homeowner Association Law said the conflict is apparent, as the property manager should oversee the maintenance contractor. She said Fashion Hills homeowners are right to worry if their painter is not properly licensed.

“Whoever executed the contract with the unlicensed vendor is also putting the association in legal jeopardy,” she said. “We have documented many instances in which contractor work had to be redone at huge cost to homeowners because it was substandard.”

Shames served as the UCAN executive for almost 30 years. Last year two UCAN employees went public with their belief that Shames collected bonuses and opened bank accounts without informing the board. Shames said an independent review found their claims meritless.